mike dubs

U.S. Credit Card Industry Moving into Uncharted Territory

Visa and Mastercard earn fees on each transaction as they provide the system that draws money from one account and deposits it into another, ie. your Chase credit card to Best Buy's account when you buy a new TV.

The banks that issue the credit card's will be the ones who need to be saved by the government if more and more debtors become defaulters. Those defaulters lose by having horrible credit scores that will take them over 7 years to repair. If the government steps in, the inflation rate will move higher and tax payers will ultimately carry the burden.

I would rally prefer the credit markets to crash instead of further government interference. Hopefully, there arent too many John Pseudonym's out there.

I believe the rate of late-stage delinquencies is a leading indicator for the rest of the market as crisises start at the bottom.